The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a periodic system. Describe the differences between the two systems in accounting for the following events: (1) purchase of merchandise, (2) sale of merchandise, (3) return of merchandise to supplier, and (4) payment of freight charge on merchandise purchased. Indicate which inventory-related accounts would be debited or credited for each event.

Q: All descriptions reveal the characteristics of a periodic inventory system, EXCEPT: Merchandise…

A: The correct option is: Inventory record is always up-to-date

Q: Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30.…

A: Journal entries refer to the recording of transactions in an appropriate way. With the help of…

Q: der the periodic inventory system, all increases and decreases in inventory, such as purchases,…

A: Solution: False.  Under periodic inventory system Daily inventory records are not maintained.

Q: Under the perpetual inventory​ system, the journal entry to record the freight paid by the seller on…

A: Under perpetual inventory system, inventory account is used instead of purchases account. For every…

Q: Under the periodic inventory system, the journal entry to record the cost of merchandise sold at the…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Hugo Ltd., follows the LIFO system. From the particulars given below, ascertain the cost of sales…

A: Last-in, first-out method: Under the last-in-first-out method goods that are brought at later dates…

Q: When the perpetual inventory system is used, the inventory sold is debited to a. Cost of Merchandise…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: The two basic approaches to accounting for inventory and thecost of goods sold are the perpetual…

A: Introduction: Perpetual inventory system: Under this system of inventory maintenance, the…

Q: hich of the following accounts is unique to a merchandising entity that uses the periodic inventory…

A: The periodic inventory system does not record each transaction at the time they occurred. It…

Q: Which of the following accounts is used in the periodic inventory system but not used in the…

A: Periodic inventory system:   A periodic inventory system is one of the forms of inventory valuation.…

Q: Which of the following accounts would be included in the chart of accounts of a merchandising…

A: Periodic Inventory System: A periodic inventory system is a form of inventory valuation where the…

Q: 1. Under the perpetual inventory system, in addition to making the entry to record a sales return, a…

A: Note: “Since you have asked multiple question, we will solve the first question for you. If you want…

Q: The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a…

A: Definition:   Perpetual and periodic inventory system: In merchandise business, there are two types…

Q: Which of the following statements about a periodic inventory system is true? a. The periodic system…

A: Periodic inventory system means where day to day in or out of goods is not recorded and value of…

Q: Cost of goods sold is debited each time a sale is made under which of the following inventory…

A: The carrying value of the goods that are sold during a given period of time are termed as cost of…

Q: What is the method of accounting of inventory in which the cost of goods is recorded each time a…

A: The cost of goods included the cost of goods that are sold during the period.

Q: Listed below are several terms and phrases associated with inventory measurement. Pair each item…

A: FIFO : First-in-first-out LIFO : Last-in-first-out Gross method : The sales / purchases are recorded…

Q: The transactions that follow took place under the perpetual inventory system. Record each…

A: Ledgers are the accounts prepared by a business to prepare the financial statements and contains as…

Q: When preparing a worksheet for a merchandising company using periodic inventory system, which…

A: 1. The income statement contains all temporary accounts and the balance sheet contains all the…

Q: When a retailer sells merchandise to a customer on credit which one of the following accounts is…

A: Selling merchandise to the customer would include two journal entries, one is for selling goods, and…

Q: Which of the following accounts will not be found in the cost of merchandise sold section of the…

A: Income statement: The income statement is a financial statement that shows the net income earned or…

Q: The firm maintains a perpetual inventory system. Determine the cost of merchandise sold for each…

A:

Q: • Explain why there isn't there a "Cost of merchandise sold" expense for a service business.…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: When using the periodic inventory system, which of the following generally would not be separately…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: If an accounting manager asks you to delay recording an invoice for the purchase of merchandise…

A: Income statement is prepared by the business organizations so as to know how much amount of gross…

Q: Which of the following is incorrect about the perpetual inventory method? a. purchases are…

A: Perpetual inventory method : Perpetual inventory method records real time transactions of inventory…

Q: Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net…

A: Income statement: It refers to a financial statement that presents all the income earned by the…

Q: ABC Company would like to know which of the following statements is correct? a.In a merchandising…

A: Solution: When company is using perpetual inventory system, purchase discount given by supplier will…

Q: The two main inventory accounting systems are the Perpetual and periodic. purchase and sale.…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: When the merchandise inventory account provides a running balance of the goods on hand, which…

A: The question is related to Inventory system. There are two methods of Inventory.Perpetual inventory…

Q: Assuming that the amount of the physical count of the stock of merchandise is less than the recorded…

A: Perpetual Inventory System:- It is a system where inventory purchases and returns are recorded…

Q: Which of the following items should be included in a company's inventory at the balance sheet date?…

A: Inventory is the current asset which is being held by the entity for the purpose of sale.

Q: 31. Under a perpetual inventory system, a.a physical count is required to determine cost of…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month…

A: As per First in First Out method(FIFO) inventory sold is from units purchased earlier, therefore…

Q: When using a perpetual inventory system, the journal entry to record the Cost of Merchandise Sold is…

A: Option a.

Q: Under the perpetual inventory system, in addition to making the entry to record a sale, a company…

A: When sales will be made company has to increase cost of goods sold cost and has to reduce inventory…

Q: If the balance in the inventory account is greater than the physical count, which of the following…

A: When inventory is found to be greater than physical count , we need to increase inventory. For…

Q: If each purchase and sale of merchandise is recorded in the inventory and the cost of merchandise…

A: Under periodic inventory, no cost of goods sold is entry is recorded for every sale transaction. At…

Q: The Esquire Company employs a periodic inventory system. Indicate the effect (increase or decrease)…

A: Periodic Inventory System: Under this system, the balance of the merchandise inventory is not…

Q: Which of the following accounts would be included in the chart of accounts of a merchandising…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: In the periodic inventory system, all purchases of merchandise during the period is recorded on what…

A: There are two type of inventory systems in the business. One is perpetual inventory system and other…

Q: ears in both the debit and the credit columns appears in the credit column only is correct as stated…

A: Merchandise inventory is the value of items in stock, whether they are finished goods or raw…

Q: Travis Company purchased merchandise on account from a supplier for $12,900, terms 2/10, net 30.…

A: Perpetual inventory system: It is a method of inventory management that records real time…

Q: The journal entry to record the payment of freight cost under the perpetual inventory system is as…

A: Given transaction is: Payment of freight cost under the perpetual inventory system